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Car rental and insurance

Its that time of year. Weekend trips, family vacations and relative visits. For a lot of us that means getting to our destination and the renting of a car to get around,

Then the Question! Should I pay for Insurance through the rental company? OUR RECOMMENDATION IS YES! (to an extent). You’re going to be offered full insurance coverage (liability and car damage) or the option to just buy Collision Damage Waiver (CDW) OR Loss Damage Waiver (LDW). CDW and LDW are basically the same but you should read the coverage details to be sure.

If you have automobile insurance in force for your personal cars, your coverage extends to temporary rental cars for liability and if your policy provides comp and collision coverage that would apply to the rental auto also.

So why do we say buy from them? We recommend buying the LDW or CDW coverage which covers damage to their auto while you operate it.

Most personal or business auto policies do not extend coverage for certain provisions found in the rental agreements. In addition, provisions in the contracts call for immediate payments. So while your company may investigate the incident or verify an amount of damage, your credit card may be charged what they have determined is the damage amount. Other provisions that can cause you heartburn:

LOSS VALUATION – most personal auto policies cover insured automobiles for the lesser of the actual cash value  of the covered vehicle or the amount necessary to repair or replace the damages property. The rental company provisions determine the value at their discretion and they will base it on full replacement value not actual cash value.

LOSS SETTLEMENT – The rental company may choose to make repairs immediately before your company has a chance to approve the damaged property. If a delay occurs them usually your credit card is charged the cost until settlement is made or agreed to.

LOSS PAYMENT – Rental agreements make renter responsible for any loss of income that might occur as a result of the car being out of service for whatever reason. This coverage is not a coverage provided by your personal insurance policy so it’s an out of pocket expense to you. This mounts up if there is disagreement as to the value or repairs to be made.

ADMINISTRATIVE EXPENSES – Things like towing, storage, appraisal and claim adjustment may be charged to your credit card until settlement is made.

DEDUCTIBLES – Renters policies will have deductibles to be paid if coverage is not with the rental company.

EXCLUDED COVERAGE AND DRIVERS – There may be exclusions under your policy that might prohibit coverage from applying. There may be drivers that are not covered under a personal policy that might be covered if listed in the rental agreement.

Each rental agreement is different. Coverages under personal auto policies may be different. Coverage provided by credit card companies are different and limited.

For peace of mind buy the collision damage or loss damage waivers and comply with the terms of the rental agreement.